South Korea’s presidential office: will investigate structural factors behind high volatility in the Korean stock market, not limited to leveraged ETFs

PANews July 29, according to South Korean media KBS, Kim Yong-beom, head of the policy office at the Office of the President of South Korea, announced that in response to the recent sharp fluctuations in the South Korean stock market, he has asked the Financial Services Commission and the Financial Supervisory Service to investigate structural factors that cause the volatility of the South Korean stock market to be significantly higher than other markets. The scope of the assessment includes not only leveraged ETFs, but will also cover the entire market structure. The South Korean stock market has its own structural problems; similarly sized global market fluctuations are often amplified in the South Korean market. While leveraged ETFs may have exacerbated market volatility, they are not the only reason. Factors such as the share of derivatives trading and the composition of investors should be重点 examined.

Kim Yong-beom also mentioned that market enthusiasm for Chinese DRAM maker Yangtze Memory (YMTC) being listed in Shanghai, as well as factors such as Chinese state-owned enterprises pushing the R&D of deep ultraviolet (DUV) lithography equipment, may trigger market concerns about the competitiveness of Samsung Electronics and SK hynix’s memory chips. The situation is similar to the earlier “DeepSeek shock.”